Posted
by
timothy
on Friday May 23, 2014 @05:41PM
from the collector's-item-in-advance dept.

schwit1 (797399) writes "The CEO of Fiat Chrysler said he hopes that people don't buy his company's electric car, the Fiat 500e, which he is forced to sell at a loss because of state and federal mandates. 'I hope you don't buy it because every time I sell one it costs me $14,000,' Sergio Marchionne told the audience at the Brookings Institute during a discussion of the auto bailout. 'I'm honest enough to tell you that I will make the car, I'll make it available which is my requirement but I will sell the limit of what I need to sell and not one more,' said Marchionne. Fiat Chrysler produces two Fiat 500s. The gas-powered Fiat 500 has a base price of $17,300. The electric Fiat 500e runs $32,650. In his candid remarks, Marchionne blamed regulations set in place in California and by President Obama." (Also at USA Today.) If they find they're selling too many for comfort, couldn't they raise the price?

You are correct that Chrysler could in theory choose to leave the California market entirely. But in order to sell any cars in states with emissions and fuel economy rules like those of California, an automaker has to sell these compliance cars.

They seem to be sticking their heads in the sand and hoping that EVs go away. Rather than seeing how Tesla is doing and worrying about the affordable model coming in a year or two they just churn out a lazy compliance car by shoving batteries in an ICE car, shove their fingers in their ears and hope no-one buys them.

Fiat Chrysler is a dinosaur, and is going to be killed off by evolution unless it makes a real effort.

Probably not, they have to meet CAFE standards. For every car they sell that gets less than the mandated average, they have to sell one that gets more. The mandated average is just that, it has to be the average fuel economy of all the cars the manufacturer sells on a yearly basis.

Sounds like the CEO is basically saying that they have to sell it in order to meet CAFE standards, and due to caps put on the electric cars, they can't charge what the car actually costs to build and markup. So he intends to se

Do you think in this cut throat world that a CEO isn't already exhausting every resource he can muster in order to cap the damages on a loss before saying don't give us your business?

I know you mean well, but that's a bit like saying all they got to do is hit/catch the ball to win. It neglects that there are forces preventing the hit or catch. Sometimes you can overcome those forces and sometimes you cannot. But please remember, you too can become a millionaire, all you gotta do it get 1 million bucks.

I can guarantee you that he's not "exhausting every resource he can muster" because there's really just one figure that matters most, and that's volume.

Most people think EV prices are all about the batteries, but that's just not true. Even the drivetrains are really expensive. *Everything* is really expensive because they're made in small volumes. The Volt's drivetrain, for example, reportedly costs about $6k per vehicle. Why? It's a heck of a lot simpler than a gasoline drivetrain, with a tenth as many moving parts and less raw materials costs. But they're just not mass produced. Here's [enstroj.si] my favorite line of EV motors, the EMRAX series. They're the size of a desk fan yet have up to 160kW peak power (215hp); they're designed for electric airplanes, and can be inline chained together for even more power. Simple, tiny, no exotic raw materials... but they cost something like $4k each, plus something like $3k for the inverter/controller. Why? Because they're all wired by hand. Even the magnets are hand-wound. With enough volume, you could open a Chinese factory to pump out something like that for maybe $500 dollars a pop. But that's just not the situation today.

The same thing applies to batteries, which is why Tesla's gigafactory is such a big deal. A lot of people seem to think, "But hey, batteries are already mass-produced!". But really, those are the wrong kind of batteries, batteries designed for small electronics, not the type of large EV batteries you can get serious economies of scale on rather than wasting your effort stamping out tens of millions of tiny casings and the like, then wiring ten thousand little cells together and trying to ensure no cell failures. Also the batteries that best suit EVs are cobalt-free, while the potential for price reduction on your typical small electronics li-ion batteries is limited by cobalt prices; the raw materials on most EV batteries are far cheaper, it's always been manufacturing costs that have held them back. Something like the gigafactory has the potential to dramatically slash EV pack prices per kilowatt hour.

Basically, in pretty much aspect, if you want EVs to be cheap, you need to go big. Just like it is for gasoline cars, the key to affordability is scale. If your team responsible for a gasoline car engineers every part from the ground up and produces them in small volumes like some supercar makers do, it'll cost an arm and a leg and your firstborn as well.

To go big, you need a combination of an interested, motivated public and a good sales campaign. Once people start driving EVs, as a general rule, they love them and never want to switch back, but it's hard getting them to start, especially because of "range anxiety" concerns. So things like including with a purchase or lease X number of free 24-hour gasoline car rentals, or installing widespread fast charters, or making available range-extending self-steering genset trailers, or things of that nature is important to making people comfortable enough to take the plunge the first time. And of course subsidies can help a great deal while you're trying to establish the market.

I thought it pretty obvious I was just talking about the electric drivetrain. That figure was from old comments from Bob Lutz (long before it was announced that there would be a mechanical linkage on the gasoline engine) when responding to why the price of the Volt spiked so much over the course of development; I could try to find the article again if you'd like. It was pretty stupid of them, IMHO, they could have asked any EV hobbyist how much low-volume EV drivetrains cost and they could have told them; L

I don't disagree with that but that can only happen when you have options. If state and federal regulation is requiring a loss, they are going to try to mitigate it.

What we have here is a company more or less forced into a position and therefore they would be forced into mitigation. Unless you think the entire loss is not real and this is just a publicity stunt using reverse psychology in order to generate sales.

How is he short sighted? The Republicans have fuck him and his company. They want to put him and all of his employees out on the streets. To their kind, autoworkers are scum that need to starve. That is their world. That is why they are doing this to him. They are forcing him at gunpoint to sell cars at a loss until they go out of business.

Are you saying that the oil and coal burning/global warming denying republicans are forcing Chrysler to sell electric cars (at a loss) "at gunpoint"? And they're going to hurt the oil and coal industries so they can add the autoworkers to the unemployed?

Marchionne blamed regulations set in place in California and by President Obama.

I must have missed when the president switched parties. Obama the Republican. Who knew.

This is the funniest comment I've heard. While I'll admit, most republicans and conservatives alike (yes, there is a difference), don't like some of the tactics and fundamentals of unions, your comment is highly ironic. I don't think the republicans WANT to force the company out of business, I think most conservative groups and libertarians were agains the auto bail-out in general. Mostly because it goes against free market principles, and also rewarded specific companies for mismanaging the company into bankruptcy. This is true of the auto companies that were bailed out, as well as the banks that were bailed out. The UAW took a big hit, because a big chunk of the bailout went to make sure the Union still got it's demands met, for hourly wages and retirement perks, all from a dying company. If any other company was about to founder, the last thing most employees would get would be raises and more pay. I certainly didn't when I worked for a company that was going under, they told us the truth, they were hurting, they enacted unpaid furlough days, and froze all pay increases as a step in trying to save the company from going under. While us workers didn't like this necessarily, it was better than all of us get let go when the company goes under.

The part of your comment about forcing them at gunpoint to sell cars at a loss is the ironic part of your statement. Just WHO do you think is the party and groups that are pushing the hardest for electric car sales? Who is pushing the hardest for higher, hard to meet CAFE standards for gas mileage, and who is behind the electric car subsidies to try to entice the general public to purchase these overpriced, under-performing, cars? Here is a hint... it's not conservatives.

You "think" wrongly then. Republicans are pro-corporate welfare and anti-union. They're only talking big about being anti-bailout these days because it's just one more reactionary way to oppose the president on absolutely everything.

But it is already expensive enough that it doesn't make a lot of sense to buy if you want to buy one to save money on gas. The price difference is $15350. If we assume $4/gal for gas, then that's 3837.5 gallons. Fiat 500 gas version gets 31mpg city, 40mpg highway. If we average that, then we get 136,231.25 miles before the price difference pays for itself. And that's assuming we paid cash for the car. If you finance it, then add interest on top of that.

Now, if you want to get the electric version because it's cool and/or you want to support the technology, cool, but realize it's not really saving you money on gas.

But really, if they have to make at least X cars, and they're not making one more, why is he telling people not buy them? They're still making the exact same number. If some people listen to him and don't buy them, doesn't that just mean they'll sit on the lot longer and sold for even less? If it does help them somehow, could they make the electric version is really horrible colors?

But really, if they have to make at least X cars, and they're not making one more, why is he telling people not buy them? They're still making the exact same number. If some people listen to him and don't buy them, doesn't that just mean they'll sit on the lot longer and sold for even less?

136k isn't an unreasonable mileage for a car. Actually, it's on the low end for a good car. My last car broke 240k - all on the original engine block - before it incurred damage that was uneconomical to repair, and that was due to driver error, not breakdown.

Do not know for this car, but for the Prius, there is a full replacement for the batteries, up to 100K miles, and 160 K miles in California. And they haven't had to replace many - I've heard none at all, but am skeptical of that, you have to have some failures. But the warranty is golden.

At least for the Prius, the "Your batteries will fail, and you'll have wiped out any savings" meme has not proven out in real life.

Nissan offer an 8 year 100k mile warranty, and Tesla offer 8 years and unlimited mileage. Tesla have tested their packs up to 750,000 miles which left them with about 80% capacity, which is what you would expect from the type of lithium cells they are using (rated for 3000 cycles, ~300 miles per cycle = 900,000 miles).

Long story short it would easily outlast a petrol engine and give a diesel a run for its money.

Is your boss's Prius's battery covered in gold trim and studded with tiffany diamonds and signed by George Clooney or something? Because brand-new OEM Prius batteries cost $2.5 to 3.5k and you can get refurbished ones for under $1k. Some companies that specialize in refurbished packs charge less than $1k *total* (including labor) to swap out a Prius pack with a refurbished one.

$10k? If that's true, either your boss was pulling your leg or he was scammed, big-time.

1) As you noted (but didn't factor into your figures) maintenance difference is hardly just oil changes. In reality, electric drivetrains have a tenth as many moving parts. They don't even have a transmission, for crying out loud, have you priced what it costs to replace a transmission? Just replacing a timing belt can cost a fortune. One can't so readily discount maintenance, it's a huge portion of operating costs.

2) If you drive the car until you totally run it into the ground, the average

Currently in CA (the only state in which they're sold, until they start in Oregon later this year), there is a $2,500 rebate from the state in addition to a $7,500 tax credit from the Federal government.

You forget the government incentives. $2,500 from the State of California; $7,500 from the federal government and $2,000 from FIAT themselves.

The effective difference is is then $3,350.

I actually did my homework, and the result was that for my old car (Audi A4, 25 mpg avg.) at 4.29-4.49 per gallon (Premium Fuel) the savings with the FIAT 500e for my daily commute were such that with the incentives, the rest of the car cost amortizes in about 5 years.

And I don't want my tax money paying to support state-subsidised religious schools* or some empire-building military operation in Afganistan. If you do not wish to be part of the country, then by all means leave and apply for citizenship elsewhere. Or stay, an put your vote to use.

*I'm in the UK. The government is very keen on public-private partnerships in education.

You are assuming that the problems with the price of electric cars versus gasoline cars is economies of scale. If that were true then we'd think that Chrysler would want to see their electric cars be successful. Problem is that gasoline cars are made of iron and aluminum, two of the most abundant elements on Earth. Electric cars need lithium for the batteries, an element that is relatively rare and therefore will always be more expensive.

Where is the benefit in electric cars anyway? Our electricity comes from coal and natural gas. We could build more wind and solar but that means energy prices triple, if we're lucky. It's quite possible energy would be ten times what it costs now if we cannot use fossil fuels or nuclear. We can build nuclear power plants and get cheap energy with very little carbon output, lower carbon output than wind and solar per kWh produced.

Nuclear power does not address the issue of the cost of materials in electric cars. What would lower our carbon emissions and give us cheap energy is synthetic fuels. We can make hydrocarbons from carbon in the air and close that loop, no new carbon added to the atmosphere. Power it all from nuclear power. Then we get to have our cars made from cheap iron and aluminum. We also get to keep our 300 mile range from a five minute fill up.

Using waste annihilating molten salt reactors also means we get to burn up the "spent" fuel from old reactors that keep piling up. Nuclear power means cheap energy, cheap cars, clean air, and reduction in radioactive waste. Electric cars means expensive energy, more carbon output, and unless we get modern nuclear power that radioactive waste will continue to slowly decay away. We can get rid of the waste in decades with modern nuclear power or we can let it sit for hundreds of years.

you made this up. this is a troll lie. The truth is, they can't raise the price because they're trying to sell a certain quota of "compliance cars". They chose $32,450 as the price because that's the most they could charge but still meet the quota.

No, they can't. CA Regulations don't allow electric alternatives to be n% more than gas.

Citation needed. I looked through the regulation and I see no mention of requiring a certain price for ZEV's.

What it does require is that a certain % of the sales be of ZEV's. If they are change too much, they won't sell enough. This leads to two solutions:

1) Spend little on R&D for an electric vehicle. Sell it just cheap enough (at a loss if you have to) to meet the minimum requirement. Whine about it.2) Put some effort and investment in developing an electric car that people will actually want with a manufacturing cost that leads to a price people are willing to pay. Refine the design over time so that it becomes that profit center that saves your bacon when the bottom inevitably drops out of the IC car market as the cost of gas heads toward the stratosphere.

There is no regulation requiring electric alternatives be less than n% more than gas. There's no way to even enforce it. The Fiat has to be sold for $30k at a loss but the Tesla can go for $80k because the government things its so much nicer? No, Fiat just knows they are competing with the Nissan Leaf and no one would buy their car for 50% more than the Leaf is going for. He just wants to whine and make it sound like the government is ruining him, not that he's being beat in the market.

And as for that Executive Order, its directed at the California government as a goal to strive towards. You are trying to make it sound like he has passed some sort of law directed at car manufacturers which would be illegal, and impossible as there's no legal definition for "cost competitive".
http://gov.ca.gov/news.php?id=... [ca.gov]

There is no law requiring a Fiat 500e to be sold for less than 200% the price of a regular 500.

Well, they don't magically get cheaper to build just by building more. They get cheaper to build as the manufacturer refines the process, improves the technology, and scales the production lines to amortize the fixed costs of a production facility over a larger number of vehicles. That is, it takes work to make them cheaper, above and beyond just making more.

As long as there's sufficient demand, producers will have enough reason to scale up the production and work to bring the production cost down. Even

This is in effect an indirect tax. Buyers of non-zero emission cars are effectively paying for the loss that automakers make on the zero emission cars. It would be much more honest to tax them directly instead of letting the auto industry act as an intermediary. But then again: taxes and honesty are probably not words that one should use in the same sentence.

If Tesla can make a full-sized sedan with a 265 mile range (85KWh battery) for $73,570 while averaging a 25% profit margin there's no reason why Fiat shouldn't be able to make a profit selling a much smaller car with a much smaller battery and a much smaller range. Perhaps they should invest in Tesla's gigafactory to bring down cost and/or license Tesla's batteries like Toyota did. If they're like Nissan then they only need around 1/4 the capacity of Tesla's 85KWh battery pack, a smaller electric motor and a smaller inverter. If it cost Fiat $46,650 per-car then they're doing something wrong. They're probably using those more expensive, lower energy dense LiFePo prismatic batteries that everyone except Tesla is using.

If Tesla can make a full-sized sedan with a 265 mile range (85KWh battery) for $73,570 while averaging a 25% profit margin there's no reason why Fiat shouldn't be able to make a profit selling a much smaller car with a much smaller battery and a much smaller range.

Tesla actually loses money on their cars [forbes.com], they make a profit by selling emissions credits to other companies. The car side of the business is a money loser; the emissions-selling side makes their profit.

Tesla isn't doing it because they decided to go after a different market with a car with a reasonable range. They also have economies of scale. Their batteries should also scale nicely downward since most of the cost is in the 18650 cells.

Part of Fiat's cost is that they are trying to shoehorn an EV drivetrain into a gasoline powered car. There are a lot of changes possible with an EV as Tesla has shown that can reduce the cost of manufacturing. Designing an EV from the ground up reduces cost. After all, Nissan's Leaf is profitable, though Nissan really needs to address a few major problems (like their lack of active cooling for the batteries).

It makes more sense the way it's set up. Without the requirements, manufacturers won't develop the technology. Once the technology is better developed and more mature, and in higher volumes, the costs will drop. If you make it a government tax and then government gives grants to the auto manufacturers to develop the technology, they'll have no incentive to do it with the intention of making it viable. This forces the auto manufacturers to work on manufacturing methods that are viable. That said, I'm al

another way is to say that automakers are shifting their costs. Dirty air and smog lead to lung disease and cancer, ergo higher medical costs. The health problems also lower worker productivity.
Why should I have to pay for the damage done by cheap cars?
--
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-... [mozilla.org]

Browser plug-in software makes people spend more time at their computers becoming sedentary and isolated, leading to health problems , ergo higher medical costs. The health problems also lower worker productivity.
Why should I have to pay for the damage done by browser plug-ins?

It would be much more honest to tax them directly instead of letting the auto industry act as an intermediary.

The reason they don't do that is to leave as much of the implementation as possible in the hands of the free market, while still achieving the electric vehicle roll-out goals. It's pretty much the same thing as CAFE regulations, which mandate the fleet fuel efficiency, but let the car companies decide how to adjust models and prices to achieve the overall average.

It is an approach that is strongly advocated by free-market-oriented (ie: right wing) policy analysts. The sound-bites against it you hear from the right are not genuine objection to the practice as opposed to other means of achieving the same roll-out goals, they are API calls; programming you to go onto social network sites and bitch about guv'mint regyuh-lashun.

Toyota & Honda, heck even GM, can all make zero emission cars. I do like what California did though. They set _sales_ qoutas_ instead of manufacturing qoutas, so they companies couldn't weasel out of getting real zero emission cars on the road. It's rare to see regulations that have teeth in them. I suppose with the amount of Smog California has (insert South Park Smug jokes here) that's pretty important though. But I wish Arizona would do it. We have days when you're not suppose to go outside because the smog is so bad...

Uh, that's what California did first. Ever notice how some vehicles have special auto parts listings for "California" versus "Federal"? The California Air Resources Board has required certain vehicles to meet their standards since sometime in the seventies, which was why some engines weren't available there or had extra emissions control equipment installed.

I'd much rather see a mandate for a certain percentage of all-electric vehicles than I would to see a deviation from the Federal standard for any given state. I really wouldn't mind an electric for my commute as I only drive 20 miles round-trip, and my wife only drives 40 miles round-trip, so either of us could easily commute with an electric if they'd build one that we would actually want to own. The Fiat 500e was the first one that appealed to me, and I was hoping for a 100% electric Dodge Dart or Chrysler 200 so that I could have four doors, but that doesn't look like it'll be in the cards based on what's being said here.

How much did it cost to setup their infrastructure to produce these cars? It seems like it would be a loss if they don't sell any at all. Why wouldn't they raise the price? This sounds like it's more about politics than sound business decisions. That makes me question Sergio Marchionne's ability to run the company effectively.

If they don't sell zero-emission vehicles, they have to buy zero-emission credits to make up the difference. Fiat has clearly decided that it's cheaper to sell electric cars at a loss (since if they raised the price they couldn't hit the required sales percentage) than to buy the credits.

How much did it cost to setup their infrastructure to produce these cars? It seems like it would be a loss if they don't sell any at all. Why wouldn't they raise the price?

The electric Fiat shares probably 90% of its parts and most of an assembly line with the gas-powered Fiat 500; it's the remaining 10% (particularly the batteries) that make the 500e so expensive to produce. California clean-air laws require Fiat to sell a certain number of electric cars if they want to do business in California and restr

So, we are to believe that the electric variant costs $46,650. I can only believe that must include a huge amount for the sunk costs - designing the electric car, rather than each electric car being $30k more expensive than the gas equivalent.

So, we are to believe that the electric variant costs $46,650. I can only believe that must include a huge amount for the sunk costs - designing the electric car, rather than each electric car being $30k more expensive than the gas equivalent.

(Disclosure - I am a cost accountant)

Wouldn't be surprising actually. The powertrain is completely different than the gas powered car and there are non-trivial engineering, tooling, and other fixed production costs that have to be amortized across lots of units if you are going to sell at a relatively low price. Plus I imagine the powertrain is not produced in big enough volumes to realize real economies of scale so the unit costs I would expect to be fairly high. Given the state of the art in electric vehicles I really don't see an electric vehicle being significantly profitable at less than $50,000 right now. There simply aren't enough of them out there to drive the unit costs down. I expect that number to fall over time but it will require investment by companies and maybe some government subsidies here and there.

On the other hand, enough with the whining and make a car that is worth what it costs to manufacture. Tesla makes a genuinely good car and sells it for a price that should bring a profit (eventually). The Fiat 500e is rather pathetic by comparison. It's a little runabout with a short range rather than a serious attempt to build an electric car. Regulations are not to blame for their inability to make a profit with an electric car. Their lack of engineering prowess and lack of commitment to the technology is why they are where they are.

It may not have a huge range (I get ~ 100 miles on full charge), but it is absolutely a serious attempt at an electric car. It appears to be well-engineered, and not an afterthought of tacked-on parts. It is based on the same chassis as the gas-powered Fiat. Doubtless it could be even more efficient if they were to optimize it more for the drivetrain it has.

I think the engineers did a commendable job of creating a practical electric car within their budget / time / materials constraints. Pathetic it absolutely is not. In my opinion, until Tesla takes on this market segment, there is nothing that will touch it.

I do find it curious that Marchionne is publicly trying to dissuade people from purchasing it. A weird reverse-psychology attempt?

On the other hand, enough with the whining and make a car that is worth what it costs to manufacture. Tesla makes a genuinely good car and sells it for a price that should bring a profit (eventually). The Fiat 500e is rather pathetic by comparison. It's a little runabout with a short range rather than a serious attempt to build an electric car. Regulations are not to blame for their inability to make a profit with an electric car. Their lack of engineering prowess and lack of commitment to the technology is why they are where they are.

I cannot bear this attitude. I hear it in the bay area all the time, and it makes my blood boil. I'll spell it out: the Fiat 500e is $36k. The Model S starts at $70k. The Model S is twice as expensive as the 500e! Do I really need to explain to you why the $70k car is nicer than the $36k car?? OF COURSE the Model S is fancier and has better range and better performance. Duh. There's too much Tesla fanboyism around here.

I see no problem making EVs for well under 50K and making a profit on them.

If Tesla can sell their cars with an 85KWh battery that gets 265 miles for $73,570 and average over 25% margins then there is no reason why a car that is quite a bit smaller with significantly less range shouldn't be able to be made for under $40K and be profitable. It all comes down to how much is invested in the technology. Tesla spent years perfecting their technology. They spent a lot of R&D optimizing their batteries, both f

It's not really the engineering so much as the lack of commitment. Building a small number of these on a one off process makes the prices silly. If they built the real full production assembly line and put the engineering into the cost reductions they'd have a far cheaper car where the costs would go down year over year as the supply and manufacturing scale play into price reductions.

Honestly the battery IS expensive but it's not that much more expensive than all the junk you are losing and many buyers fail to take into account all the positives such as the fact that you will never change the oil or have to flush a cooling system again. There are a dozen different systems in an ICE car that are no longer needed in an electric car. Combine this with the fact that battery advances have spend up dramatically over the last decade and any manufacturer that isn't prepared for the electric car is going to get their lunch eaten and FIAT has just proved they are in the latter category.

Just FYI Tesla is making money on every car sold, pretty decent money too. The problem they face is that selling only 20k cars a year they can't keep an entire production line busy, let alone an entire plant (they are renting a line in a Toyota factory part time). The average car plant runs 24/7 with three shifts and can push upwards of several hundred thousand vehicles a year. Once you get to that volume your factory costs are spread so thin and design costs spread out that you're pushing the manufacturing cost right down to the price of parts (which are also driven down by the volume).

I personally have no doubt in my mind that once Tesla gets Panasonic's battery factory built and they can fully take over the soon to be abandoned Toyota production facilities in California that they'll be able to push enough volume to cut the Model-S price in half. I'd pay $40k for a Model S so fast I'd be a blur running by and I suspect I wouldn't be alone jumping in line, after all the equivalent of a gallon of gas in an electric car is about 5 cents and I'd be fully willing to keep a gas car on standby (or even rent) if I needed more than 300 miles and didn't think the Model S could get me there.

It's actually kind of surprising how short sighted these other manufacturers are because of their ties to fossil fuels. Tesla should be giving these CEO's nightmares. I suspect they think they can shift production (or possibly get Musk to sell them the parts) if Musk is successful but I think they will find they are so far behind in the technology and Tesla has secured exclusive access to key resources that they'll get their lunch eaten and it's possible some of the big boys will end up going bankrupt.

Toyota despises electric cars and has publicly stated this on many occasions. They plan to sell exactly the number of RAV4EVs that they need to meet CARB requirements (about 2,600) and not one more than that! Toyota believes (foolishly) that the future is hydrogen...
It is unfortunate because the Fiat E is actually an excellent electric car! Far better than the gas version, in fact!

The irony here is that FCVs _are_ electric vehicles. I'm not sure why they think that a fuel cell is so much better than a battery, but hey. I'm interested to see real-world well-to-wheel comparisons of the H2 that is in the fuel stations and local electricity.

They think it's much better than a battery because that's what every Tom, Dick and Harry on the street says when you bring up electric cars - "but I need to tow my boat 800 miles per week! electric is doomed for everyone!"

You can refuel a hydrogen car very quickly - at a similar rate to a gasoline car, and the general idea is well ingrained (plug a pump nozzle into a filling point, dispense fuel per unit volume/mass then pay for it).

With current technology you can overcome one of the primary problems, the l

California doesn't regulate the prices of electric vehicles: they require that either 1% of vehicle sales be zero-emission, or that the car manufacturer buy zero-emission credits.

Nobody is forcing Fiat to build an electric car, and nobody is forcing them to sell that car at a loss. They have decided to sell an electric car at a loss because they believe the loss incurred will be smaller than the cost of the zero-emission credits, and they're selling it at a loss because they don't believe consumers would buy the car unless it's sold below cost.

Nobody's forcing them to comply with the regulations, they could just refuse to sell their automobiles in the state. It's not like Fiat is the poor struggling immigrant trying to keep open a small restaurant while a brutish California mob boss shakes it down. The California voters are the ones tired of being pushed around by big business interests. Certainly there may be better ways of accomplishing the goals that the California voters want, but that doesn't put Fiat into the underdog position.

And that, my friends, is why CAFE[1] standards are a stupid way of reducing emissions.

Except this isn't about CAFE at all, but a specific ZEV mandate in CARB standards for the 6 largest automakers.

These rules gave us the GM EV1, Nissan Leaf, the Toyota Prius, the Chevy Volt, and more. I'd say those vehicles are indications that the regulations are highly effective. You're free to disagree (once you get onto the correct subject), but I think the above list stands on its own.

While there are a number of other "compliance cars" that aren't as noteworthy, they're still helping support ZEV R&D, and amortization of the costs.

It's a fantastic car. I've had mine for about nine months and after having owned an number of rather expensive (and inexpensive) cars, this is probably my favorite.

I've never driven a gas-powered Fiat 500, but I imagine the build quality is similar. It's surprisingly comfortable and well built for a car in its price range. I'm pretty particular about the noise levels in my cars and the electric model is reported to have more sound dampening than the standard model; external noise is probably more obvious when there's no engine to mask it. Quiet, fantastic acceleration, and virtually no maintenance. There's a lot to like about this car.

I hope they continue selling them. I've leased mine since the technology changes quickly enough that I expect better range / faster charging, or both within 3-4 years (plus competition from Tesla in that market segment), but if there were no other option I would definitely purchase mine at the end of the lease.

This is my first electric car, but I can say unequivocally that I will never purchase another gas-powered car (unless it's an exotic / sports car). It really is that much of an improvement over internal combustion.*

*For me. Obviously electric cars are not for _everyone_(yet). If you need to haul bales of hay up a mountainside four times a week, buy a truck.

After having bought a Tesla Model S I find it difficult to go back to an internal combustion engine. The responsiveness and smoothness are unparalleled with throw you back in the seat instant acceleration.

As I wrote in another comment in this thread, I actually did the math, and based on my driving needs cost-wise the 500e is a net savings (including cost of the car) for me (compared to the car I was driving when I decided on the 500e) over five years.

Plus, it is fun to drive. This is subjective, of course.

It's clearly not for everyone and every situation, and even though Fiat offers free rentals at major agencies for those longer trips, I am glad that we have a second (ICE) car in the family.

The issue is that in California they have to sell a certain portion of their fleet with zero and low emissions. He is saying that in order to convince people to buy the zero or low emission vehicles in adequate proportion, they have had to subsidize the price by $14,000. He does not expect that they will "sell too many" â" they picked this price because it's the number they expect will sell exactly the right amount.

I think some of the other posters are probably correct in that a nontrivial portion of that 'subsidy' is accounting for R&D costs. I think every major manufacturer either has or is considering electric cars, so it makes sense to start building them to work out engineering issues. Perhaps it is helpful from an accounting standpoint to attribute this to the requirement to sell these in California. I think even if they weren't, there would be similar development expenses for the inevitable introduction

Sadly, environmental issues, and limited resources, isn't something that the free market will handle when left to its own devices. I have no sympathy for automakers that need to be dragged kicking and screaming into the 21st century.

The Fiat 500 has also a very very efficient Diesel mult-jet version, which can do 76 MPG (in UK gallons or 63 MPG US gallons). Unfortunately you can't buy that in the US.

Since the gasoline Fiat 500 can get 40 US MPG Hwy under stricter standards, and since diesel has a 12% higher energy density per volume and costs more (here), that's really not a terribly impressive number...

I have a Fiat 500, the non-electric one. For $17,000, it's a good car. But it's clearly a sub-$20K car - and unless they completely redesign major sections of it that are completely unrelated to the propulsion, they aren't going to be getting it to a be worth $30K even with the value of an electric engine.

Just for one example of what isn't good, the sound system supposedly supports USB. It does, technically, but it does so in the least competent way possible. You would expect it would support folders - like it does for data CDs. It does not. You would expect it to play songs in filename order. It does not. It plays every song on there, in the order of file creation. I noticed in the manual that the entertainment system runs on Windows Phone 7 - I have a very difficult time believing that Windows, in any version, has such broken support for FAT32.

Another example? The seat belt warning alarm activates even if the car is in park, within a second of turning on the car. I've had to get into the habit of buckling up before even turning the key.

The Fiat 500 is a cheap car. I'd say an electric version is worth about $25K (I couldn't actually use one myself - I use street parking, so I literally have nowhere to charge it up).

Tesla got one thing right - because electric cars, for the foreseeable future, are going to add $20K-$30K to the cost of the car, you're better off doing so in high-end cars where that's an extra 10-20%, not double the cost.

I have the 500e. I love it, although I'm inclined to agree about it not being competitive in the 30K+ range. It has a lot to gain from the lease / state / federal subsidies currently in effect. I can't really think of anything that annoys me in this car after nine months. I'll probably get another one in 2 or 3 years. (Or a Tesla if there is one in the $30-40K range or if I decide I want a larger car.)

This is the same mindset automakers had back in 1994, when the California (CARB) emissions standards were going to (eventually) require a tiny percentage of all cars sold had to be zero-emission vehicles (ZEVs).

Ford's Th!nk and Chrysler's EPIC were piles of crap ("compliance cars") produced just to minimally meet the regulations. GM thought they could one-up them, and produce an actually NICE ZEV that people would WANT, which would then allow them to sell MORE conventional vehicles, which is where the infamous EV1 came from. Toyota had a similar mindset as GM, but couldn't compete on ZEVs, and invented their Prius as an alternative to meet the standards.

The successful court challenges to the CARB rules set back ZEVs by two decades, and we're repeating history again, today. GM makes a nice ZEV (with some inspiration from Tesla and Toyota this time), while Ford and Chrysler sell crap ZEVs they have to give away, and Toyota doubles-down on their Prius with longer range and plug-in capabilities.

Nissan is the only surprise, being quite competitive this time around, while their previous Altra attempt, despite pioneering lithium-ion battery EVs, wasn't noteworthy at the time.

In theory, the free market should produce incentives for solving for safety and efficiency. In reality, it just optimizes the local maxima, since no one wants to be the first to "blink" by making these new technologies standard (thus greatly lowering the cost), ensuring they stay high-priced luxuries.

If we leave it to the free market, we'll be stuck on gasoline engines for another century at least, with all the negative impacts that will have on our economy as the increasing cost of oil and various shocks hit. That's not even dealing with the environmental or global climate change issues.

Government regulations can jump-start the industry and so far it appears to be working for electric vehicles. We are still in the early-adopter stages; they'll get better and cheaper as long as we keep at it.

Fun fact: government almost always leads the way into uncharted territory. It wasn't private industry that built trans-continental railroads (which makes Atlas Shrugged hilarious). It was the US government. The government gave the rights of way, passed a series of massive funding bills to give the railroads free money and tax breaks, sent in the army to protect the rails from Native Americans, robbers, etc. Without federal government involvement, the US rail network would not exist in the form it does today.

For that matter, neither would the interstate highway system.

Nor would computing: it was massive US federal government spending that paid Grace Hopper to invent the first compiler! And it was government spending that created the Internet, both TCP/IP via ARPA and the WWW via CERN.